Buy

Despite healthy balance sheet growth, higher provisioning led to a 58% y/y fall in IDFC First Bank’s PAT. Microfinance credit costs have peaked for the year. We value the bank at 1.2x FY27e PBV and retain a
Buy rating, primarily led by the higher balance sheet growth, strong NIM and improving operating leverage.

We visited Gabriel’s plant and attended its management meet on Thursday in Pune. The company’s change in strategy by way of entry into the high-growth ‘sunroof’ product line is positive and would be a major value driver.

Poonawalla Fincorp (PFL)’s 4QFY25 PAT declined ~81% YoY to ~INR623m (MOFSLe: INR1.8b). FY25 loss was INR983m (vs. PAT of INR10.3b in FY24).

Maruti Suzuki (MSIL)’s 4QFY25 margin came in 110bp below our estimate at 10.5%, largely due to the lumpy nature of multiple costs that affected its performance.

RBL continued with its clean-up drive in Q4 as it fully provides for the MFI NPA portfolio leading to historically lower NNPA at 0.3%. However, the bank utilized its contingent provision buffer of Rs2.7bn which along with nearly flat margins and strong card fees helped manage profitability, albeit negligible at Rs0.7bn.

SHFL’s Q4FY25 results were mixed – credit cost was elevated causing a PBT miss, which was offset by lower tax rate that led to in-line PAT.

DLPL reported a steady Q4, with EBITDA beating street/our estimates by 6% and adj PAT improving 34% on YoY basis. Strong performance in core markets (Delhi NCR), buoyed by network expansion, offset the persistent muted performance of Suburban (mid-single digit revenue growth).

The revenue growth performance (+2.9% QoQ CC) exceeded our estimates (+2.5% QoQ CC). ~80% of its portfolio mix maintained a steady state, while the rest of its business mix (L&T and Others) reported a decline of 8% and 3% QoQ, respectively. The continued improvement in large deal wins (13 large deals in FY25) and meaningful conversion of those deals are supporting the growth within BFSI. Despite having booked record high deal TCV of USD390m (11% QoQ), the deal funnel still looks encouraging (26% QoQ and 86% YoY). Even...

AXSB saw a decent quarter due to better deposit growth at 7.0% QoQ (PLe 3.0%) and higher fees (8.7% beat). Adjusted for (1) PSLC income of Rs1.7bn (2) PSLC cost of Rs5.9bn and (3) provision write-back of Rs8.0bn in SR, core PAT beat PLe by 5.0% to Rs65.8bn. Since higher LDR was a constraint to healthy loan growth, balance sheet has been repaired as LDR declined QoQ to 88.7% from 92.6% in Q3FY25. While asset quality was better owing to lower net slippages, provisions adjusted SR write-back, remained elevated at 86bps (PLe...

Management targets ~Rs20bn revenue and ~18-20% EBITDA margin for FY26 and expect ~20% revenue CAGR over the next two years. Kirloskar Pneumatic (KKPC) reported a healthy quarter registering 20.7% YoY revenue growth while maintaining an 18.5% EBITDA margin. During the year, KKPC gained market share in its Air compression segment aided by stronger adoption and demand for Tezcatlipoca compressors while the Refrigeration compression segment remained a growth driver with traction from dairy, food...